Karachi: In a dusty factory in northern Karachi, the nation’s oldest tile manufacturer had been struggling to jump on board one of the world’s fastest-growing construction booms.

Fighting to compete with cheap imports from neighbouring China, Shabbir Tiles & Ceramics Ltd, a unit of the House of Habib family business operating since 1841, had suffered four years of losses. It is now on course to post an annual profit next financial year after Pakistan placed an anti-dumping duty on Chinese tiles in October. That follows similar moves from the regulator on steel products.

“We have got an industry which has been affected by a lot of Chinese imports,” chief executive officer (CEO) Syed Masood Abbas Jaffery said in an interview. Now “the overall construction industry is in a growth phase and so is the tile industry.”

The move to protect some local industries comes as concerns mount in Pakistan that its strongest ally China, which is financing $55 billion of infrastructure projects across South Asia’s second-largest economy, was destroying domestic manufacturing by flooding the market with cheap goods. Pakistan is a key part of China’s Belt and Road trade initiative and one of the main land routes that links it to the Arabian sea through the port in southwestern Gwadar.

Pakistani industrialists fear China’s ever-growing influence will put them out of business. Before the duty was imposed, tile imports from China had more than doubled in the past five years and now make up roughly 50% of the industry, according to Shabbir’s chief financial officer Waquas Ahmed. With government support, the tile maker now forecasts it will boost operations to near 90% capacity for the year starting July.

Pakistan’s National Tariff Commission has been fielding an increased number of anti-dumping complaints, with Chinese companies featuring “fairly significantly,” chairman Qasim Niaz said in an interview in Islamabad.
Pakistan’s move to place tariffs on imported steel boosted local production by 23% to 3.6 million tonnes last year, the biggest increase among 40 countries, according to World Steel Association data, and local steel firms are expanding.

“China has been dumpers,” said Towfiq Chinoy, an adviser at Karachi-based International Steels Ltd who believes the anti-dumping tax is “significant” for the local industry. “They have sort of put us in handcuffs for three-to-four years.”

‘All-Weather Friend’

Publicly Islamabad is loath to criticize China—the neighbour it has long called its “all-weather friend”—particularly as ties with the US under Donald Trump have become increasingly strained after he denounced the country for harbouring terrorist groups in August. Some analysts see US pressure driving Pakistan toward China as its relations with neighbouring India and Afghanistan show little sign of improvement.

While Chinese businesses are keen to take advantage of opportunities in Pakistan on the back of the trade corridor, Pakistan’s raising of barriers is unlikely to displease too many in Beijing.
“China could suck it up in the short-run,” said Uzair Younus, a South Asia analyst at Washington-based consultancy Albright Stonebridge Group Llc. “After all, Pakistan’s economy taking a hit hurts Chinese investments and weakens Pakistan’s ability to repay Chinese loans—it’s a catch-22.”

Trade deficit

Pakistan’s economy is growing at the fastest pace in a decade, but cracks are appearing with current account and trade deficits widening. In an attempt to reverse a deteriorating external position, the government in October imposed additional import taxes on more than 700 “luxury” goods including tiles and cars.

Still Pakistan is running an increasing trade deficit with China, which was the South Asian nation’s biggest contributor.

“Chinese goods will continue to flood the market, they can’t all be stopped,” Faisal Ahmed, CEO at Artistic Denim Mills Ltd, said in an interview at his clothing plant in Karachi. Bloomberg

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So where does the hypocrites Modians stand now after this article? They don't seem to get tired telling themselves and to the others that China will have everything free in Pakistan and Pakistan won't get anything rather it will turn into Chinese colony blah blah blah...

There is nothing wrong with protecting local industries, in order to buy time for them to become competitive. China did the same thing after all.

However, is this a case of "buying time" until local industries become globally competitive? Or is it about protecting inefficient and unproductive companies from any real competition, essentially giving them crutches at the taxpayer's expense?

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So where does the hypocrites Indians stand now after this article? They don't seem to get tired telling themselves and to the others that China will have everything free in Pakistan and Pakistan won't get anything...

The guy hates Modi's India more than Pakistan. So unless you haven't been following his usual slaughter of Modi's India, then I think you've missed the angle.

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I know him more than you and I have defended him on multiple occasions when modian trolls were trying to label him false flag but this report is a rant by the author (not the poster)..I don't know if you can understand this or not.

There is nothing wrong with protecting local industries, in order to buy time for them to become competitive. China did the same thing after all.

However, is this a case of "buying time" until local industries become globally competitive? Or is it about protecting inefficient and unproductive companies from any real competition, essentially giving them crutches at the taxpayer's expense?

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It is very difficult to determine which industry is inefficient and which one is competitive provided the level ground for competition. Definitely local industry needs nurturing and certain level of protection but certain areas need to be open up for competition like automotive since Japanese and their minions have been sucking the blood of the common man in Pakistan for past 50 years or so. Anti dumping is pretty standard policy which any country can slap if it sees imports are being rather dumped into the country.

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So where does the hypocrites Modians stand now after this article? They don't seem to get tired telling themselves and to the others that China will have everything free in Pakistan and Pakistan won't get anything rather it will turn into Chinese colony blah blah blah...

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who's the hypocrite here ? one who called the article as rant and then switched sides.